February 24, 2022

Équité Association’s Investigative Services: More than 100 years in the making

Version française

Équité Association went to market in October 2021 and our Investigative Services division brought over 100 years of proven investigative acumen along.

Insurance fraud is as old as insurance itself and, along with other industries, fraud has evolved with major technological and societal trends. With so many organized crime and violent criminals committing insurance fraud schemes, the industry responded by creating a new organization with the ability to use advanced analytics, intelligence best practices, and coordinated investigations. You can read about some of our latest accomplishments here. Équité is new but we come with deep experience and a mandate to help.

Tracing the history of insurance investigation starts in 1862. Lloyds of London investigated a suspicious claim stemming from an oil cargo ship named Poseidon. The owner provided multiple witness accounts that pirates boarded the ship and set it on fire. However, investigators determined that the witness accounts were forged and Poseidon never existed. After a lengthy run from the law, the owner was charged and incarcerated for insurance fraud and forgery.  

By the 1920s, false claims of pirate attacks were a thing of the past and arson replaced it as the scourge of the insurance industry. Canada’s Property and Casualty (P&C) insurance industry formed the Investigation and Loss Information Bureau, with the primary mandate of investigating and collecting data on fire losses for its member companies in Ontario and Quebec.

“If you look at the past names of investigative services, you’ll frequently see ‘fire’ as part of it,” points out Toomas Maripuu, Director, Analytics & Countermeasures. “Some of the older investigative files that I’ve come across were fire investigations. It makes sense – in the early years, most of the insurance fraud would have likely related to the property fire losses and arson.”

The mid-1920s saw the price of automobiles dropping and becoming more accessible to the average family. Workers were able to live further from their jobs and commute by car. (By the 1950s, motels, shopping malls, and subdivisions grew to accommodate personal vehicles and create the car culture we still have today.) With the ubiquitous automobile came opportunities and incentives for criminals to commit auto insurance fraud.

In 1925, Canada’s P&C insurance industry established the Automobile Loss Investigation Bureau to combat the increasing automobile insurance losses and to establish a database on those losses. The following year, another Canadian investigative organization, which focused on fire losses in Ontario and Quebec called Investigation and Loss Information Bureau became a branch of the New York Auto Theft Bureau. Under this new umbrella and renamed Fire Underwriters’ Investigation and Loss Information Bureau, its operations expanded to include investigations of fire losses throughout Canada.

Skipping to 1940, the industry was then offering protection across many aspects of life and expanding investigations. The Fire Underwriters’ Investigation and Loss Information Bureau became the Fire Underwriters’ Investigation Bureau (FUIB), with the goal of eradicating arson and minimizing fire losses to persons and properties. By 1959, its focus also included covering losses to persons and property resulting from all causes, and assisted in the detection and prevention of criminal acts causing insurance losses.

In 1969, FUIB acquired the Canadian Automobile Theft Bureau as a new branch, expanding operations to cover all provinces except Manitoba, Saskatchewan and British Columbia. Three years later, FUIB relocated its head office from Montreal to Toronto.

FIUB changed its name again in 1973, becoming the Insurance Crime Prevention Bureau / Service anti-crime des assurers (ICPB). Deborah Helgason, who began working with ICPB in 1986, remembers the organization as a well-respected investigative body working on behalf of the insurance industry. “We investigated property claims, arsons, and auto thefts,” she recalls. “For a short time in the late 1990s we even offered polygraph expertise.”

Like the 1920s, new technology emerging in the 1990s provided fresh opportunities for insurance fraud. The internet became common in both households and businesses, bringing the world to our neighbour hoods and tech-savvy fraudsters to our industry. Investigators were also noting more organization behind the fraud. While individuals were still committing insurance crime, law agencies and investigators began to see instances of criminal gangs, along with links to international criminal groups.

In the 1990s, ICPB cooperated with the Canada Border Services Agency (CBSA) to document vehicle information numbers (VINs) of legally exported vehicles to help detect stolen or fraudulently registered vehicles. Ms. Helgason and her team also worked in tandem with police and CBSA on a short project to find vehicles shipped out of the port of Vancouver illegally. “That ten-month project netted about two million dollars worth of stolen vehicles being sent back to the insurers who had paid out on the claims,” adds Ms. Helgason. “Most of those vehicles were stolen out of Ontario.”

By 1997, ICPB and its investigative services was absorbed into the Insurance Bureau of Canada (IBC), established in 1964 as the national trade association of the Canadian P&C industry. Under IBC, the investigative services division continued to provide leading-edge fraud support for its member companies.

Over last two decades, ISD has continued to build on its trusted reputation, connecting with other agencies to drive results. Bryan Gast, Vice President, Investigative Services at Équité, a former provincial police officer, has conducted fraud and financial crime investigations since 1996. “Our investigators are professional, knowledgeable, and possess unique skills. Along with our strong reputation of providing quality work, we’re trusted collaborators with our partners,” notes Mr. Gast.

In 2021, collaborating with a local police department helped one ISD investigator, Mike Keizerwaard, receive the International Association of Auto Theft Investigators Insurance Investigator of the Year award. In partnership with Hamilton Police Service, the team investigated an organized auto theft ring, recovering a total of 39 vehicles, valued at $1.6 million. Read the story here.

Insurance investigators offer valuable assistance to the police agencies, providing subject matter expertise, resources for investigation, and insurer intelligence – helping to uncover even more layers of criminal activity. With crime moving online, perpetrators are hiding behind screens, often evading traditional investigation tactics. “If there’s no face-to-face interaction and crime is committed by someone behind a computer screen, it’s much more difficult to identify who that person is,” says Mr. Gast. “That’s where analytics comes into play. Merging analytics with investigations, the two feed off each other. You need to have both to be successful today.”

We are so proud of the history of ISD, and look forward to another 100 years of great stories and superior fraud eradication. With pirate attacks replaced by international crime rings, and criminals more connected and tech-savvy than ever before, Équité is positioned to defending hardworking Canadians from this persistent threat, tackling the challenges of insurance fraud today and into the future.